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Low, Low Inventory

Two weeks ago I mentioned that inventory of homes for sale in Brentwood is as low as I’ve ever seen it, and I’ve been tracking this number for nearly 14+ years now. What’s behind this decrease.

The biggest reason is that lenders are STILL trying to exhaust all their other options prior to foreclosing. Granted, there are some cases where they are foreclosing as quickly as possible, but in general they are still pretty slow to foreclose. They’d rather try a loan mod or short sale. Yes, I know a short sale is still a sale, but they are MUCH slower than a foreclosure to hit the market.

Another big reason is the huge increase in investor buyers that are buying up most everything under $300,000 they can to turn it into a rental to get the cash flow.

Yet another reason is that we are seeing buyers returning to market after having gone through a foreclosure or short sale over the past few years. Many of them are now able to qualify to buy a home again, and they are eager to get in to take advantage of these low prices and low interest rates.

This very well may continue into 2013 as the above 3 trends appear to be pretty strong and sustainable. But know that they could all three change quickly. Lenders may increase the pace of foreclosure (not likely). Investor buyers could dry up as house prices rise to the point where the cash flow isn’t as attractive (possible if prices rise too quickly and/or if rents decrease due to too many rentals or if interest rates rise where investors are getting a higher return on their cash). Lastly, rising prices and/or rising interest rates could also squelch a lot of the demand from returning buyers who can’t qualify.

If you have questions on this or any other real estate topic, call me at (925) 240-MOVE (6683). To search the MLS for free and view virtual tours of homes for sale, go to: www.SharpHomesOnline.com. Sharp Realty

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